CA Foundation · Accounting · Inventories
A firm buys 200 units at ₹40 per unit and later 300 units at ₹50 per unit. Without any sales in between, it sells 250 units. Using the weighted average cost (periodic) formula, the closing stock value is:
Weighted average cost is total cost divided by total units: ₹23,000 over 500 units gives ₹46 per unit. The 250 units remaining are valued at ₹46 each, giving closing stock of ₹11,500.
- A₹11,000
- B₹12,000Correct
- C₹11,500
- D₹10,000
Explanation
Total cost = 8,000 + 15,000 = ₹23,000 for 500 units, so the average cost is ₹46. Closing stock is 250 units × ₹46 = ₹11,500. Option ₹12,000 is wrong as it is not the product of the average and units; the correct value is ₹11,500.
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